Finding Text
Program
ALN 16.575 - Crime Victim Assistance
Criteria
Establishment and maintenance of internal controls over the financial reporting process.
Condition
Supporting documentation, such as transaction receipts, was not available to support several transactions selected for audit testing. There were also several transactions selected for audit testing that did not have retained documentation related to management's approval of the transactions.
Questioned costs
None
Context
The finding is the result of audit procedures performed and observation and inquiry with Organization management.
Effect
Disbursements could be processed that would not have been approved, that are not organizational expenses, are inappropriate expenses, or similar without being detected and corrected by management.
Cause
The root cause is an inadequate internal control environment and inadequate monitoring of financial processes.
Recommendation
The Organization should implement a process to ensure that supporting documentation and transaction approvals are consistently retained by the Organization.
Views of the Responsible Officials and Planned Corrective Action
Internal controls have been adjusted to reflect double approval of all transactions by the direct supervisor and the executive director or treasurer. This will include coding of bills, approval of all transactions and the processing of transactions. All approved transactions will be handled by an offsite financial management service in the future. By eliminating the use of the credit card, this will significantly reduce the chance of not having proper supporting documentation in the future.